City Budget Process Allocates Millions To Reserve Funds

Without much discussion, the Eugene City Council unanimously approved a supplemental budget Dec. 10, including $2,258,355 increased revenue in the General Fund, which is now facing an approximately $3 million budget gap, down from $5.9 million earlier in 2013. A total of $1.5 million was sent to the replacement fund for the rebuilding of City Hall. Supplemental budgets are passed when the city’s income or expenditures are different than predicted in the fiscal year’s original budget.

Bonny Bettman McCornack, a former city councilor who was a leader in the campaign against the failed city service fee vote in May, says that supplemental budgets are often passed without enough review. “That’s typical of this mayor and council — not to question the mayor and city manager and not to look under any rocks or behind any corners,” she says. “They have delegated all of their fiscal responsibility on behalf of the taxpayers to the city manager.” While the Budget Committee often deliberates over amounts in the tens of thousands of dollars, she says, millions of dollars can be allocated during the supplemental budget process without debate.

Mayor Kitty Piercy writes in an email, “Supplemental budgets all contain items that have been previously vetted and usually have a hearing and are passed at the same council meeting unless a councilor or citizen[s] have objections.”

On the city manager’s recommendation, City Council allocated $1.5 million to the Facility Replacement Reserve for the City Hall project, $584,726 to the Reserve for Revenue Shortfall fund, $400,000 to the General Capital Projects Fund and $100,000 to the Equipment Replacement Subfund to pay for fire turnout gear and hydrant replacement.

Putting money into the City Hall fund deserved more scrutiny, Bettman McCornack says. “That was a huge issue that we raised during the fee campaign, that they are diverting general money into this City Hall fund and rebranding it one-time money,” she says. After years of attempts to build a lavish City Hall, she says, voters should get the chance to vote on a bond for a responsible design.

Piercy says that the way the city is funding its City Hall rebuild shouldn’t surprise Eugeneans. “The council has had many council meetings and much discussion regarding city hall and plans to move forward,” she writes. “Council voted some months back to move the city hall renovation forward and we are on schedule to do that. We have also discussed ways to cobble together funds for this work over the next couple of years.”

The largest component of the supplemental budget was the marginal beginning working capital (MBWC), which is the difference between the funds the city predicted it would end the year with and the funds it truly had.

During the public hearing prior to the council’s vote, speaker John Barofsky raised concerns about the availability of the supplemental budget document prior to the meeting. “It was not online until this afternoon,” he said.

On the same evening, the Budget Committee, which will reconvene in January, decided to look further into six different strategies for closing the General Fund gap.